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In this section, we describe some of the trends driving sustainable energy. In general, market tastes change, and policy initiatives come and go. Technologies that depend on a single factor for their growth are more often fads than lasting players in the national economy. Sustainable energy will ride on a variety of interwoven trends, and its growing importance is correspondingly more certain. Following are some of the developments impelling this growth.
- Improved cost and performance: The principal emerging sustainable energy technologies have shown impressive improvements in key variables over the past two decades: cost, capacity factor, reliability, etc. In the case of renewables these improvements surpass projections made by public- and private-sector analysts over the years.5 Unfortunately, competing energy technologies have in some cases progressed even faster, particularly gas-fired powerplants. That is, the target has moved. Yet the performance improvements of mature technologies tend to level off, showing less improvement per unit of investment. The sustainable energy technologies, in contrast, are still young, and improving rapidly.
- Strong latent demand: Numerous public opinion surveys from the past twenty years illustrate strong support for clean energy. In 1998, for example, the Texas Public Utilities Commission ordered state utilities to ask consumers about their energy preferences. The utilities undertook a series of "deliberative polls," in which randomly chosen participants were asked their energy preferences, and then given a weekend of presentations by diverse energy experts with ample opportunity for questioning. A Houston audience that, before the deliberations, had declined to pay any extra for energy efficiency or renewable energy, subsequently said they would pay an average of $3.00 extra per month for the former and $6.50 extra per month for the latter.6 Voting patterns demonstrate similar approval for political leaders who support environmental policies.7
- Concern over climate change: The growing concern to hedge against a potential climate disaster has raised awareness of the energy-environment link. Sustainable energy technologies are not always the cheapest short-term means to cut emissions of greenhouse gases; it might prove more effective in the next few years to plant or preserve carbon-absorbing forests, or to upgrade inefficient East European powerplants. Nevertheless, new sustainable energy technologies must be part of long-term climate strategy, particularly in developing countries that hope to boost generating capacity dramatically in coming years, in order to improve their citizens' lives. Equally important, in the short term in the U.S., sustainable energy can provide a visible, sympathetic hook that will appeal to citizens/consumers.8 For both these reasons, sustainable energy will remain a strong element in climate protection strategies.
- Other environmental concerns: Sustainable energy technologies can alleviate the air pollution that afflicts millions of Americans and even greater numbers of people in the developing world, as well as reducing the degradation of land and water by extracting ans using conventional energy resources. As it becomes clear that even low-level air pollution harms human health, and as the Federal and state governments consequently tighten air regulations, low- and zero-emission sustainable energy technologies will provide increasing value.9
- Distributed energy: Some analysts detect a momentous shift underway in the world energy system: away from large, centralized, constructed energy technologies connected to consumers via extensive transmission and distribution networks; to smaller, manufactured energy technologies and efficiency measures installed close to where users need power. These "distributed" energy resources ("DER") include photovoltaic systems, industrial cogeneration and district heating, gas-fired micro-turbines and reciprocating engines, flywheels and batteries, insulated windows, passive solar architecture, fuel cells and the like.
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Many analysts detect a broad trend toward distributed energy resources, which are generally more sustainable than conventional energy technologies.
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For several reasons, DER are generally more sustainable than the nuclear and coal-fired behemoths they supplement or replace. First, no energy is lost in long-distance transmission and distribution lines, markedly improving efficiency. Second, even before considering such losses, those DER that require fuel convert it more efficiently. Finally, the DER family includes many low- and zero-emission technologies, because these technologies deliver economies of mass production, as opposed to the economies of scale present in conventional powerplants. That is, to deliver a kilowatt-hour of energy at anywhere remotely near market price, a nuclear plant must be quite large. Yet that is not true of manufactured fuel cells and the like. This makes them cost effective in small, distributed applications.
- Restructuring of the electric sector: Many states have determined-or may do so soon-to introduce competition to their electric sectors. The Federal government is pondering legislation as well. Restructuring allows customers to choose an energy supplier, thereby creating the opportunity to tap into clear, undeniable public support for sustainable energy through direct retail marketing of "green energy" products to residential and some commercial consumers. The nature of the resulting market will depend largely on the detailed rules of the resulting system.
- Policies to build sustainable energy markets: All markets have rules. Sustainable energy will not thrive in a market-oriented electric sector unless system rules enable meaningful, informed customer choice. Toward this end, private firms, public interest advocates and political leaders have developed a collection of policy tools that allow renewable energy to thrive. These include, for example: renewable portfolio standards; net metering; consumers' right-to-know and truth-in-advertising requirements; system benefit charges; equivalent emission standards for old and new powerplants; and others.
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